Greg Palast

War: Why Your Gas is So Expensive


Greg Palast, reporter for Harper’s magazine and Rolling Stone, explains how the primary goal of oil companies is to use the war power of the national governments to restrict supplies in order to artificially increase the price of oil, the consequences of the war in Iraq on the price we pay, the fight over control of Caspian oil in the Georgian conflict, the chicken-egg argument about the role of the oil companies and the Pentagon itself in pushing all this imperial expansion, the hidden government taxation in your price of gas per gallon, the truth that the taxpayer bailouts of Freddie Mac and Fannie Mae are ultimately bailouts for foreign holders of U.S. debt rather than home owners, and his new project “Steal Back Your Vote.”

MP3 here. (24:18)

Greg Palast is the author of the New York Times bestseller, Armed Madhouse (Penguin 2006). His first reports appeared on BBC television and in the Guardian newspapers. Author of another New York Times bestseller, The Best Democracy Money Can Buy, Palast is best known in his native USA as the journalist who, for the Observer (UK), broke the story of how Jeb Bush purged thousands of Black Florida citizens from voter rolls before the 2000 election, thereby handing the White House to his brother George. His reports on the theft of election 2004, the spike of the FBI investigations of the bin Ladens before September 11, the secret State Department documents planning the seizure of Iraq’s oil fields have won him a record six “Project Censored” for reporting the news American media doesn’t want you to hear. He returned to America to report for Harper’s magazine.

19 thoughts on “Greg Palast”

  1. Ed Wallace, Stephen Lendman and William Engdahl have been reporting for months now that the whole peak oil narrative is a lie and that, yes, oil production has been suppressed to raise prices at the pump.

    Anyone with half a brain can figure this out.

    Good for Greg Palast though to wake up the right wiing morons in the Republican Party who have no clue of what is going on.

  2. I wonder whether the reason that the BBC pays him ( it’s hardly the paragon of impartiality that Greg Palast claims it is) is because his relentless implication, seldom stated but always lurking in the background, that any Israeli motivation for the mid-east wars must be so much the less significant, if the oil companies are so mighty.

  3. If you are a 9-5’er trying to keep your nose clean and hoping to live the “good life” then you are being played. You either remain oblivious and go on or you start asking questions… There are few answers to be found at

  4. Try to find a story by Ed Wallace, Fort Worth TX Telegram
    Title is Oil Crisis. Oh, really? They are hiding oil offshore. By Linn Cohen-Cole

    He says that all classes of oil shipments, except one, have gone up since a year ago, including Middle East oil in transit and Non-OPEC oil in transit.
    He says the only class that has gone down is the four-week changes in Westbound Oil at Sea.

    Is oil that would be bound for the U S being hidden offshore? Read his article – it is an eye-opener.

  5. Rowan, not all can be fit in a half hour interview, but did you not hear him agree that the oil men did not want war in Iraq? He’s written all about how the neocons wanted to privatize all the Iraqi oil and drop the price to destroy the Saudi royal family – all about Israel. (Of course, Baker III put an end to that idea, if not the onset of the war.) I think Palast mostly neglects the role of the Lobby and neocons, not at all because he denies it or is trying to minimize it, but is simply covering other aspects of the same story.

  6. Greg Palast in “Armed Madhouse” discusses at length the role of the neocons and their favorite boy, Ahmed Chalabi. The neocons wanted to destroy OPEC, diminish the role of Saudi Arabia in the oil market and to immediately privatize Iraq’s oil.

    Phillip Carroll was sent to Iraq for six months to ensure that Paul Bremer did not privatize the Iraq oil system. Instead, production sharing agreements were agreed upon. The neocons failed to privatize Iraq’s oil system and did not destroy OPEC, either.

    In “Armed Madhouse” Palast has a graph comparing what the oil men wanted and what the neocons sought inside Iraq. To say Palast has ignored the neocons is untrue. He has written about the neocons at length regarding Iraq’s economy and the oil system.

  7. Dear Mr Scott Horton:

    You do great work and have a fine radio program. Even though I disgaree intensely with many of your guests, I appreciate your efforts. I am a true blue liberal and have been all my adult life and have never been afraid to sayit loudly. I only wish the Democratic Party would say how proud they are to be “liberals” instead of running away from the word. I also support gay rights 100% which the Democrats also run away from in their platform.

    I despise right-wingers, conservatives and others who have supported the GOP from Nixon-to-Reagan to Gingrich to the present Bush administration which has turned America into a corporate-fascist-surveillance state.

    Just remember Mr. Horton, its the scum Republicans who love Joe Lieberman and put him into office when he first beat the Republican U.S. Senator Lowell Weicker and then GOP Governor Jodi Rell supported Lieberman the last time around instead of the “official” CT Republican candidate. Lieberman has been supported all along by the likes of the late William F. Buckley, whose BuckPac helped him to defeat Weicker. The Republicans from the start wanted Weicker out because Buckley and other fring right-wingers were angry that Weicker worked to impeach Nixon. Without Republicans, Joe Lieberman, the GOP’s favorite “Democrat” would not have beaten Weicker and would not have beaten Ned Lamont in the general election.

    Its time you Repukes look in the mirror!

    Anyway, great site and radio show, Mr. Horton! You go boy!

  8. Dear Scott Horton:

    Perhaps you could ask William Engdahl to be on your radio show to discuss the sham of “peak oil” and how the big oil corporations manipulate the prices at the pump. He has written many articles on the subject.

  9. Dear Oscar Jones,

    You characterize concern over the peaking of world oil production as a “lie” and a “sham,” and juxtapose each statement with another to the effect that the big oil corporations are manipulating prices. The impression you give is that the big oil corporations are the ones promoting this “sham.” However this is certainly not the case, as the big oil corporations have mostly been either outright deniers of imminent peak oil (e.g. Exxon) or belated, none-too-explicit, and half-hearted endorsers (e.g. Chevron). The real work is being done on sites like The Oil Drum, Energy Bulletin, and Global Public Media. Counting myself among those trying to bring attention to this issue, I of course don’t like your labelling of us this way, but I find it even more worrying that intelligent people (judging by the fact that they listen to Scott Horton) are so quick to to reach the conclusion that any problems with the supply of the 20 million person-years per day of hard labor (which is what the U.S. uses in oil-based energy per day) must be the result of the oil companies trying to pull a fast one on us.

    You might want to do a little research on the subject before jumping to such conclusions. Did U.S. oil production not in fact peak in 1970? Did not the largest oil field in North America (Prudhoe Bay) begin to rapidly decline (about 10 percent per year) only about 12 years after its first production? Has not Mexico’s Cantarell (formerly the second most prolific in the world) been declining on the order of 20% per year for the past few years, despite continuing work on it? Is North Sea production not down about 40 percent from its 1999 peak? Is Australian oil production not down 35% from 2000? Is the largest field in Eastern Canada (Hibernia) not down 35 percent from its 2004 peak? I suppose you could say that all these are part of the oil companies plan to restrict output, but why not do some research to show that this is so? You would have a really big scoop.

    I’m not aware that the writers you cite have addressed these issues. Certainly Lendman and Palast, have in the past cited very misleading figures for heavy oil resources in Venezuela – the total quantity of hydrocarbons in place in the ground the ground (taking those figues as true estimates) is far, far above any reasonable estimate for the amount of it that could actually ever be converted into usable barrels, and critically, the _rate_ that such barrels could flow, even with much larger investments, is not very significant compared to the amount of new production that has to come on line every year to make up for declines in the existing base of global production (Richard Heinberg’s “Open Letter to Greg Palast” is a good place to start on this). The abiotic hypothesis about oil’s origins – which the former peak oil advocate Engdahl now believes – is certainly interesting (Heinberg also wrote a good critique of it a few years ago), but it is largely irrelevant to the question of whether global oil production must soon descend after having risen for 150 years.

  10. Steve Athearn:

    I have done research on this topic. And I do not believe the narrative of the big oil corporations or the government. I suggest you get an open mind and open your blind or lying eyes.

    Why should I believe what Richard Heinberg says anyhow? Who pays Heinberg anyway? Where is he getting paid from?

    Why did Cheney suppress who attended the energy meetings in 2001 if it was so “inncoent?” The oil companies have a virtual monopoly and act like the Mafia in the way it prices the pump. Anyone with half a brain can figure this sham out. And its a sham, alright. Yes, the oil companies are liars and screwing people at the same time. I do not give a rat’s ass what you think.

    Oil companies are not yelling that there is “peak oil?” That is news to me, fella. So funny indeed that they are claiming they need to drill to cover the shortages.

    Yes, it is a sham that there is a “peak oil” crisis right now. And yes, oil is suppressed to raise prices—I suggeswt you open your EYES ALREADY Mister! You are the one who is easily fooled and by those liars you cited.

  11. The picture he paints of oil execs ‘not wanting’ what occurs, but being powerless to affect it, also seems nonsensical to me, Scott. He is obliged to pretend this, because he has defined the wars as somehow bad for big oil, in the long run.

  12. Hey Naysayers:

    Shut up already and get off your lazy asses and read the frickin book Greg Palast wrote—“Armed Madhouse.”

    Otherwise keep your pie holes shut!

  13. Price hike also comes from expectations of future scarcity. So any intimation of wanting to bomb Iran will get the price up even if the delivery rate is not down. War is hoovering up a certain amount, and so is China. Also, I have been talking to some marketing exec from Total/Elf recently and in his opinion it's not missing crude that's causing pain but a dearth in refining capacity; add that to the equation.

    Additionally, one should always have the Mises Reflex:

  14. I like Greg Palast, but I strongly disagree with his analysis. He states taking 1 million barrels of oil per day is the primary driver of the price hike. But the world supply is about 85 million. This 1 million decrease from Iraq is less than a 2% decrease in world supply. This small amount cannot account for such a large price rise.

  15. Wow! Oscar Jones, your methods of argumentation speak for themselves. If you are interested in rational argument, in answer to your question, I can’t read Cheney’s mind, but I assume the 2001 TF at least overlapped with planning for eventual military occupation of key oil producing regions. The focus on who the TF met with may be in a sense a diversion from that role. The question is why the goal of occupying the oil producing regions? The interests of the oil companies were no doubt viewed sympathetically, but surely even a pro-Big Oil administration was not unmindful of the threat to business-as-usual as a whole posed by the dwindling spare capacity in the world (peak oil per se may have been only a nascent concern at the time). Can go into some detail but I don’t have time now.

    As for peak oil not being a problem _now_, are you aware of the data which indicates that _net oil exports_ globally have in fact decreased for each of the past two years (though total oil production remains around the historic maximum). Look at the top 5 sources of oil exports to the U.S. esp. Mexico, Venezuela and Nigeria and what is in fact happening to their exports to the U.S. Sorry again I don’t have time to elaborate now.

    As for Heinberg, I regard him as a very thoughtful writer on these subject. Obviously he’s getting income recently from books and speaking engagements.

  16. Steve Athearn:

    I fundamentally disagree with your premise, so anything after that will have no bearing on how I view this situation.

    You might know a lot, but even birlliant people can be fooled or taken in by lies and propaganda. I do not doubt your strong and in-depth knowledge of the oil industry, but I do not agree with your premise that big oil corporations do not suppress oil output so they can increase prices.

    I also believe and with good reason, that big oil corporations lie to the public on a daily basis—-just look at how much money these oil corporations have been putting into their public relations campaigns lately.

    Public relations is another name for promoting propaganda and corporations like big oil are very capable of doing a fine job in this regard.

  17. Finally I got to actually listen to Scott’s interview with Greg Palast, who’s wit is most entertaining, as usual.

    The discussion about the Saudi-Fannie-Freddie relationship near the end was rather good.

    No doubt the Iraq war has contributed to higher gas prices, but the contrast Palast makes between Iraq’s oil potential and its actual, post-invasion production, is quite misleading. He referred to Iraq as the world’s second biggest oil producer. Though that was just carelessness, it is likely to mislead some. What he no doubt meant to say is that Iraq holds the second largest _reserves_ – the standard claim in the media when Iraq’s oil is discussed.

    (Under the terms of a little-publicized Reserves Sharing Agreement (RSA) among Canada, Iraq and Iran, the “world’s second largest reserves of oil” are transferred automatically via a Swiss bank to whichever of the three countries’ reserves are being discussed in the media at a given moment. A similar, but less often invoked, agreement between Saudi Arabia and Venezuela governs the disposition of the “world’s largest reserves of oil.”)

    What Palast and the rest of the media almost never mention, is that the reserve _claims_ of OPEC are completely unverified, with many knowledgeable observers arguing that they are overstated by at least the 300 billion barrels that were created during the “race to declare higher figures for reserves, driven by the anxiety about the quota system, which everybody knows” (as acting OPEC Acting Secretary General Shihab-Eldin admitted in Oct. 2005, protesting only that the higher figures should nevertheless be believed). The 5 main Persian Gulf producers raised their declared reserves by huge amounts – between 50 and 200 percent – literally, in each case, from one year to the next, and the said increases were not accompanied by announcements of major new discoveries. Significantly, the reserves figures for the Neutral Zone shared by Saudi Arabia and Kuwait underwent no increase, but continued to gradually decline with production.

    So Iraq’s declared reserves stood at 47 billion barrels at the start of 1987. A year later they were claimed to be 100 billion barrels. By the end of Saddam’s reign Iraq’s _claimed_ (anything but proved!) reserves stood at 115 billion barrels. The increase from 100 to 115 occurred during a decade during which Iraq made exactly one (relatively small) hydrocarbon discovery (Akkas field, 1993).

    Palast invokes Iraq’s prewar _quota_ of 3 million barrels a day (not actual production levels) to contrast it with the lower post invasion production levels, and asserting that Iraq could easily produce double its quota. But once again, the claim is entirely dubious (I recall that Robert Ebel called the notion “ridiculous” as quoted in Armed Madhouse). Roughly 80 percent of Iraq’s output in recent years has come from 4 old fields (Kirkuk, North and South Rumaila and Zubair – call them KRZ, for short) – fields that have been in production for 50 to 80 years. Those were precisely the fields that were heavily damaged by production practices under sanctions resulting in “permanent loss of huge reserves of oil” (UN experts report, 2000). Those fields must be at or near the point of permanent decline. One might argue that non-KRZ production has the potential to grow well into the future, based on undeveloped field and future discoveries. But but it is completely implausible that Iraq could double or triple its current levels of output by these means – or that it would be in the interests of the Iraqi people to do so. For example, NYT article on Kurdistan’s oil potential a few months ago described two fields being newly developed (one old discovery and one brand new), both with anticipated production levels of about 50 thousand b/d. Iraq would need 50 such fields to roughly match its recent highs. Yes, production has been lower since the invasion, in part because of the invasion. But arguably Iraqi oil continues to be _overproduced_ as short term interests – currently, those of the occupying power which faces declining or uncertain supplies from its 5 leading sources of oil imports – outweigh future considerations. And Iraq remains’s the U.S.’s #6 source of oil imports – about where it stood before the invasion – another key fact not mentioned during the program.

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